When I donate to Life You Save, the money is divided equally and goes to their 22 highest rated charities. Is this inefficient?
Givewell has something similar. You can donate monthly to Givewell and have them forward the money to several different charities from their list. Is this inefficient?
In these cases, it’s likely that you’re getting better returns on credit card fees than giving directly to 22 charities, but marginally worse efficiency on processing costs, since it is probably around the same processing cost for all 22 charities, and also a processing cost at The Life You Can Save, etc.
Based on this, from a pure cost-to-programs view, I’d guess that if it is split up among at least 3 or 4 charities or more, the credit card fee benefits will outweigh the lower efficiency from the processing, so it is probably usually worth giving to something like the GiveWell maximum impact fund or TLYS, or the EA Funds, etc.
Also, I think getting all the benefits you also get from giving via those funds, like the ones esentorella describes, makes it especially worthwhile to continue giving via those funds (e.g. their research and understanding about how to optimally redistribute the funding).
When I donate through GiveWell, I donate through their Maximum Impact Fund, so that GiveWell can flexibly decide how and when the money will be allocated among their recommended charities. That way, if one charity needs less money than expected, GiveWell can steer money away from that organization and towards others that need it more. Since they’re in ongoing contact with the charities they recommend and things can change over time, they’re better placed to allocate donations than I am.
When I donate to Life You Save, the money is divided equally and goes to their 22 highest rated charities. Is this inefficient?
Givewell has something similar. You can donate monthly to Givewell and have them forward the money to several different charities from their list. Is this inefficient?
In these cases, it’s likely that you’re getting better returns on credit card fees than giving directly to 22 charities, but marginally worse efficiency on processing costs, since it is probably around the same processing cost for all 22 charities, and also a processing cost at The Life You Can Save, etc.
Based on this, from a pure cost-to-programs view, I’d guess that if it is split up among at least 3 or 4 charities or more, the credit card fee benefits will outweigh the lower efficiency from the processing, so it is probably usually worth giving to something like the GiveWell maximum impact fund or TLYS, or the EA Funds, etc.
Also, I think getting all the benefits you also get from giving via those funds, like the ones esentorella describes, makes it especially worthwhile to continue giving via those funds (e.g. their research and understanding about how to optimally redistribute the funding).
What do you mean by inefficient?
When I donate through GiveWell, I donate through their Maximum Impact Fund, so that GiveWell can flexibly decide how and when the money will be allocated among their recommended charities. That way, if one charity needs less money than expected, GiveWell can steer money away from that organization and towards others that need it more. Since they’re in ongoing contact with the charities they recommend and things can change over time, they’re better placed to allocate donations than I am.